On December 31, 20X3, PC Company acquired 60% of the 10,000 outstanding voting shares of SL Limited for $295,000. The SFP and fair market values for SL Limited were:
The capital assets have a remaining useful life of 10 years. The bonds mature on December 31, 20X7.
On December 31, 20X4, SL issued an additional 6,000 shares to PC for $130,000. SL had a net income of $60,000 for the year ended December 31, 20X4, and $70,000 for the year ended December 31, 20X5. SL declared and paid $5,000 in dividends in 20X4 and $10,000 in 20X5.
Required
Calculate the balance in the investment in SL Limiteds account on December 31, 20X5, assuming PC uses the equity method.
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com